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What Dating and Angel Investing Have In Common

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With Valentine’s Day coming up, I started thinking about how much dating and finding angel investors have in common. I came up with six tips that apply to dating and finding angel investors.

  1. Get ready to kiss a lot of frogs

Like finding the right mate, finding the right investor is, to some degree, a numbers game. You may be lucky enough to know or be introduced to your perfect match early on. However, chances are, you’ll need to talk to a lot of people to find Mr. or Ms. Right. This point was made clear in Million Dollar Women: The Essential Guide for Female Entrepreneurs Who Want to Go Big by Julia Pimsleur. You need to spend 80% of your time out of the office, looking for the right match. Focus your attention on accelerator programs, angel networks (check out the Angel Capital Association’s list of groups), business and networking meetings, business associates (such as, former business colleagues, customers and vendors), CrunchBase, demo days, Gust and LinkedIn.

  1. Ask for introductions

Like dating, the process of meeting the ONE(s) can be accelerated if you are introduced to people who know you both. In the world of angel investors, introductions can come from other entrepreneurs and angels, lawyers and accountants among others.

Ask for referrals with intent. The more clearly you can articulate the characteristics of the person you want to meet, the better other people can help you find that person. To win at networking, be genuine and authentic, provide excellent and timely follow-up and keep people engaged over time, advises Pimsleur. Make it easy for people to help you. Pimsleur does this by sending anyone from whom she requests an introduction a draft email and blurb about her and her company.

  1. Go online

Online dating sites, like Match, came into vogue years ago. Equity crowdfunding sites ‒ such as AngelList, CircleUp, Crowdfunding, Onevest, OurCrowd and SeedInvest ‒ serve a similar function. These sites allow you to advertise that you are raising capital from accredited investors. They centralize, streamline, simplify and shorten the fundraising process among accredited investors. It  can significantly expand an entrepreneur’s ability to reach accredited investors, people wealthy enough to invest a few thousand dollars or a few hundred thousand dollars in your company.

Wendy Strgar is founder and CEO of Good Clean Love, which uses natural ingredients to make love-making healthier and more enjoyable. After a bad experience with an outside investor, Strgar had been gun-shy about raising money again, but she needed money to fund inventory so she took the risk. Using CircleUp, she was able to meet a lot of angel investors and close a round of financing in 2014.

To learn more about raising money from accredited investors via crowdfunding site, read Equity Crowdfunding on Its Second Birthday: A Look Back and Ahead,  Equity Crowdfunding: Lessons From the Field, 6 Common Misconceptions About Equity Crowdfunding, 5 Secrets to a Successful Equity Crowdfunding Campaign and Stand Out In the Crowd: How Women (and Men) Benefit From Equity Crowdfunding.

  1. Present well

When dating, it’s all about first impressions. When seeking investors, it’s about your marketing materials. Do you have a good elevator pitch and investor presentation? Are you communicating clearly and passionately?

You must communicate that you are trustworthy. Do so by being candid and open in all your communications, from verbal to email to social media.

  1. Communicate your “Why”

When looking for a soulmate, chemistry and compatibility are key. It’s no different when looking for investors. “People don’t buy what you do, they buy why you do it,” says Simon Sinek, speaker and author of Start With Why: How Great Leaders Inspire Everyone to Take Action. His TED Talk on how great leaders inspire action is among my favorites. Your story and your passion make you stand out in a crowd and help you connect with like-minded people.

Strgar’s investor materials and her online presentation communicated her “why” and the values of the company. She drew a line in the sand that allowed investors to determine if they were aligned with her values. She also set clear expectations regarding the ROI her investors could expect and what her exit strategy is.

  1. Nurture relationships

Communication is key in building any relationship. It is no different with investors. Once someone invests, keep them informed. It’s not just about keeping investors happy that they made an investment in your company. It’s about keeping the relationship going in case you need additional money. No one approach fits all. Individual calls, meetings, blogs, e-newsletter, tweets are all appropriate.

Strgar does a quarterly investor update. It provides a snapshot of the company that includes sales numbers, new initiatives, doors gotten into and doors that she wants to get into. She follows up with investors who have questions or who offer help. Strgar credits her excellent relationship with her investors as the key to raising an additional round of financing in 2015. Most of the money came from those who had already invested in Good Clean Love or people whom they knew.

How will you apply these lessons to finding the perfect match for your entrepreneurial venture?

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